RESEARCH

The GPN framework is very useful heuristic tool to investigate contemporary dispersed production systems. In the CICERONE project, we will use this approach and go beyond the mere creative part or conception/design phases of the CCIs and the clustering of these activities in larger (metropolitan) urban areas. We will use the GPN approach to disentangle complex production systems in the CCIs and investigate how the different components are embedded in broader society. We will also examine where value is created under which conditions, and how power relationships within the networks impact on the capturing of value. In addition we will assess the contribution of the different components of GPNs in CCIs to local development and cultural identities. Following this approach, then, we can add a new chapter to the already extensive field of research and studies in CCIs.

As mentioned above, much research aimed at unpacking the geography of CCIs tended to focus on the clustering of the creative part of them. In the wake of the publication of the pioneering study Economy of Signs and Space by Scott Lash and John Urry (1994), a large body of knowledge has been built on the importance of the relationship between the cultural, the economy and the space in an increasingly globalised world. Parallel to the expansion of markets on a global scale, the immaterial, symbolic and cultural value of goods remains strongly embedded to specific places. In this view, cities are at the centre of the geography of cultural production: those productive systems that manage to draw the maximum profit from the symbolic relationship with the territory not only assume an important position in the capitalist economy, but also develop global sectoral specialisations (Scott, 2000). Many studies on the cultural and creative industries have concentrated on analyses of the local, very often urban-centred, dynamics of production, exploring in details all the different kinds of local embeddedness, local clustering and local relations. The production of signs tends to be dominated by a few large firms (e.g. Disney and LMVH) concentrated in large urban regions – initially mostly in the West, but increasingly now also in cities as Seoul, Beijing, Shanghai, Hong Kong, and Taipei. With the aesthetisation of consumer products and the concomitant rise of a “capitalisme artiste”, CCIs with their emphasis on creativity, local culture, intellectual faculties of labour have now also moved to the core of urban development strategies and they now represent an important factor for city competitiveness.

With the increasing (often cross-border) fragmentation of the productive cycles, complex geographies of production have emerged not just in manufacturing but also in CCIs. Up till now, the GPN approach has been largely and successfully applied to manufacturing sectors which have been affected relatively early by the global dynamics of delocalization, externalization and, in general, fragmentation of production processes. Extant research has already shown that many CCIs also rely on very long chains of activities with a very intricate geographies reflecting the contemporary economy of sign and space. The music, fashion, publishing industry, just to mention a few, produce goods too that are the result of a production network, which very often is organized following a complex geography. For instance, “The music industry is increasingly globalized and concentrated, currently dominated by five multinational companies based in a few of the world’s capital cities – Tokyo, LA, New York and London. These multinationals deal with multiple media, hardware and software, and they have integrated music production, marketing and distribution with that of other increasingly globalized) cultural or media industries” (Brown, O’Connor and Cohen, 2000, p. 438).

Because of the these transformations, there is a clear need for sharper tools for both theoretical and empirical analysis in order to grasp the complexity of current dynamics. Accordingly the conception that focuses on the core segments of CCIs and neglects the rest of the activities is misleading. Many studies of CCIs put much emphasis on the very beginning – or the “core” – of the production chain (mostly in the conception/design phase) as most of the value added creation is concentrated there. The rest of the chain is implicitly considered less important and therefore deserving less attention. We believe that this conception is basically misleading and had very deep consequences on the local development of European Regions. Particularly important is therefore to understand how the creative core of the production network is connected to the other segments and how they are embedded in the local societies. Analysis of CCIs should not focus
exclusively on the creative phase in order to grasp information on the real extent of the economy of sign and space: one must look at the whole chain of activities where conception, production and marketing of cultural and creative goods are connected.

Global production network lens and creative and cultural industries

Applying notions derived from the GPN perspective to the CCIs allows to open up new insights and understanding of these industries and their role in society. In particular, this approach allows a wider and in-depth knowledge on the economic and social implications of CCIs in different geographical contexts; moreover, this perspective sheds light on mechanisms of value creation, enhancement and capture(appropriation) in CCIs, including technological innovation (digitisation/3D), workers’ (self-) exploitation, the role of labels and brands (the significance of, for instance, the “made in Italy” label, Santagata, 2002), and reputational capital (Gandini, 2016). The notion of GPN can contribute to the analysis of the spatialisation of CCIs and specifically to the relationships between clusters/agglomerations and trans-local links, by exploring extensively around the different notions of embeddedness. The notion of creative and cultural industries is particularly suitable to catch the dynamics of inter-firm relations and to explore the governance model through the analysis of the input-output structure. Analysing the GPN of CCIs, then, is particularly crucial when local development is to be taken into account: we know a lot about the importance of CCI for the economic growth of cities and urban regions, but there is still a lack of knowledge on the implications of the different phases and of underlying activities on the economy of other local contexts. In terms of local development, using the notion of a more comprehensive production network is useful to understand not only where the largest share of added value concentrates, but also where (and in what ways) value is extracted from.

The literature has largely explored the importance of the urban environment for the development of activities linked to knowledge, creativity, culture (Scott, 2008) and, on the other way round, the capacity of such activities to produce added value. Urban economic development has translated mainly into programs of urban regeneration in order to provide the best environment for all the activities concerned with content creation and added value. Yet, the implementation of the creative city tends to focus on the built environment (such as opera theatres, museums etc.) while neglecting other types of interventions that are less visible but probably more effective, such as investments in higher and focused education, or programs targeting specific industries which represent the whole production network.

Regarding value creation and appropriation, the literature on creative labour has made clear that these industries rely on value extraction of creative workers, who are often (self)exploited. This has important consequences in terms of local development (on the medium period) of the urban regions (Pratt, 2011). Exploring the agency of workers and labour conditions within the CCIs, which are very much connected to local development strategies both at the local level and at the regional one, scholars acknowledge that “[t]he creative sector finds itself full of young people who are burnt out, exhausted, unable to consider having children, and often self-exploiting on the basis of the ‘pleasure in work’ factor” (McRobbie, 2011; Watson 2013). A growing body of literature interrogates the notion of power studying the creative labour and their agency, in particular, in terms of value production and appropriation. Still, this literature concentrates only on the content-production segment of the chain for cultural products, being it a piece of music, a webpage or a film, each of them characterised by different configuration of power. “Mobilizing the notion of power and value is useful to demonstrate how the inherent symbolic value of creative industry commodities morphs into, and combines with, other forms of economic rent […] allowing powerful actors within the wider GPN to capture disproportionate shares of the profits created” (Coe, 2015, p. 488). What is less debated and explored are the mechanisms of value creation and appropriation of the whole GPN of the CCIs, the geography of value concentration and the implications of such dynamics in terms of local development. The application of the GPN perspective is highly relevant as it allows to highlight multiple forms of value extraction, i.e. from the core to peripheral segments, but also within each phase.

Another potential contribution of the application of the GPN perspective lies in the analysis of the spatialisation of CCIs and on the relationship between patterns of spatial concentration (districts, clusters, agglomerations) and trans-local links. CCIs are often seen as a combination of local and non-local connections, and the debate, as discussed above, has largely argued about the importance of agglomeration economy for such industries. Applying the GPN perspective allows to focus into the connections between different kinds of clusters of CCIs activity, and how they are organised at different spatial scales.

Related to this, is the notion of embeddedness. All economic activities take place within specific socio-cultural, and institutional regulatory contexts (cf. Polanyi, 1957; Granovetter, 1985; Whitley, 1999; Kloosterman, 2010). All parts of a GPN, are, hence, embedded in concrete social contexts which may select, foster, constrain or shape these economic activities in various ways. The application of a GPN perspective thus allows us to explore the relationships between selected economic activities and their wider societal environments. These relationships have to be linked to different spatial scales as different forms of embeddedness are linked to socio-cultural and institutional regulatory contexts expressed at different levels – from the local to the regional and the national level (Coe, 2015). Embeddedness is an inherently multi-scalar phenomenon.

Following Coe (2015), we distinguish three levels of such embeddedness:

1. 1. Societal embeddedness: the role of socio-cultural, institutional and historical origins with respect to concrete economic activities. This is very much in line with what Granovetter calls structural embeddedness. This topic has been extensively explored for the creative and cultural aspects, though relatively little is known about the connections between these elements, the production chain and the cultural/creative segment of the chain.
   2. Network embeddedness: the degree of functional and social connectivity and the stability of the relationship.
   3. Territorial embeddedness: (where and who), how economic activities are shaped by institutional contexts. This form of embeddedness is closely linked to approaches in Comparative Political Economy (Esping-Andersen, 1990, 1999; Whitley 1999). Regulatory contexts impact on relationships between owners, managers and workers; between financial institutions and firms; between firms themselves, between sellers and buyers, between the state and the other actors, and which activities are legal and which not. Consequently, the inter-firms relations and their governance models which are at the heart of the input-output structures of GPN within CCIs are (parftly) shaped by their territorial embeddedness. These forms of embeddedness thus have significant implications both in terms of geographical knowledge and local development. Srakar et al. (2018) have recently shown how four different clusters of countries can be distinguished on the basis of cultural statistics (i. Eastern European group; ii. Mediterranean group; iii. Western European group; and iv. Outliers). Each cluster evidently presents a rather different environment for CCIs.

Components of global production networks in creative and cultural industries

Value chains and, therefore, Global Production Networks too can be unpacked into several distinct components. We follow the typology of the stages used in Mapping the Creative Value Chains; A Study on the Economy of Culture in the Digital Age (European Commission, 2017) and by the UNESCO (2009). These stages represent more of a cycle without having a clear hierarchical order:

• Creation: “the originating and authoring of ideas and content”(European Commission, 2017: 35) (e.g. sculptors, writers, design companies) and the making of one-off production (e.g. crafts, fine arts).
• Production: “the reproducible cultural forms (e.g. TV programmes), as well as the specialist tools, infrastructure and processes used in their realisation (e.g. the production of musical instruments, the printing of newspapers)” (UNESCO, 2009).
• Dissemination: “the bringing of generally mass-produced cultural products to consumers and exhibitors (e.g. the wholesale, retail and rental of recorded music and computer games, film distribution). With digital distribution, some goods and services go directly from the creator to the consumer” (UNESCO, 2009).
• Exhibition/Reception/Transmission: “refers to the place of consumption and to the provision of live and/or unmediated cultural experiences to audiences by granting or selling access to consume/participate in time-based cultural activities (e.g. festival organisation and production, opera houses, theatres, museums). Transmission relates to the transfer of knowledge and skills that may not involve any commercial transaction and which often occurs in informal settings. It includes the transmitting of intangible cultural heritage from generation to generation” (UNESCO, 2009).
• Consumption/Participation: “the activities of audiences and participants in consuming cultural products and taking part in cultural activities and experiences (e.g. book reading, dancing, participating in carnivals, listening to radio, visiting galleries)” (UNESCO, 2009, pp. 19–20).

These phases can be understood as the crucial steps of input-output systems in production networks of CCIs. They are, then, the building which lie at the heart of the CICERONE project.

More specifically, the CICERONE project will look at:

1. 1. Creation (design, planning, creation, …): CCIs tend to differ from many other economic sectors in the sense that they rely widely
      on immaterial content or conceptual innovation that is then transferred onto the process of production product (being it a chair, a song, a dress, a game, a drama, or a film). The creation of a cultural product gains its value mainly from its novelty, innovation and, production, scale economies and reproduction. How is value created, enhanced, appropriated (notably through claiming Intellectual Property Rights), and subsequently distributed along the network by different types of companies? Among the many technological developments that will be observed, digitalisation in this phase can act both as a disintermediating element, minimising the production and reproduction phase, and as an empowering tool, enlarging the chances of all citizens to become creators.
   2. Production/publishing (or physical and immaterial production): In CCIs, the unique immaterial content is often applied in the production phase to a very large number of products that can be easily reproduced. However, in some activities (artistic craft, live entertainment, …) creation strongly overlaps with production. In addition, the production phase typically intersects with more or less qualified goods and services. Technology development, and digitisation particularly, in manufacturing (and all the rapid transformations which are frequently labelled under the heading Industry 4.0) will be an important element to focus on in the CICERONE project as this can contribute to shape the general organisation of the production network and, hence, also the
      configuration of power in the network.
   3. Dissemination/trade (marketing and distribution): This phase must also be connected to the creative/conception phase, as CCIs often combine artistic-driven creation and production with corporate-driven distribution with very unbalanced dynamics of value creation and appropriation. Finally, the role of digitisation can be of paramount importance in the sphere of consumption and distribution of cultural and creative goods and services as, for instance, shown by games, music, films, and soaps. The possibilities offered by processes of disintermediation can have a revolutionary impact for whole networks. Digitisation can be observed in many different areas, such as new marketing models, new distribution models, access to many different niche markets and so on.
   4. Exhibition/reception/transmission: This phase is closely related to the previous one and similar dynamics can be observed here. However, particular attention has to be devoted to the transmission of skills, knowledge, cultural codes, behaviours which can happen relatively easy in face-to-face settings with low transaction costs. The transmission of such knowledge and information between creators, workers, users, and consumers may impact on terms of power, organization of the GPN and labour agency.
   5. Consumption/Participation: A crucial element to be kept into account is consumers’ role: thanks to their behaviours, they are able to shape the production network both at the very “end” of the network in the distribution and marketing phase, but also at the very beginning in the creation phase. The influence of street styles on the designed- and high-end fashion industry has been amply demonstrated. Porter (1990) has already pointed at the role of sophisticated local demand in stimulating local clusters by pushing firms to come up with innovation and enhance quality. This mechanism is also highly relevant for CCIs. The emergence of Dutch architecture as a global player was partly driven by challenging local and national customers (Kloosterman, 2008).

The CICERONE approach

The GPN perspective highlights the chain of flows and its dynamics as the primary object of analysis and not the firm per se (although as a legal entity the firm is always an object of policy/regulation). Our research, then, is focused on unpacking the chain of flows comprising creation, production, dissemination, exhibition/reception, and consumption. We will investigate for each of the selected CCIs (1. Architecture; 2. Archives, libraries, heritage; 3. Artistic crafts; 4. Audio-visual; 5. Design; 6. Festivals; 7. Music; 8. Publishing) the following research questions:

• • How are the selected CCIs organised?
  • Who the important actors are in which phase of the production network?
  • Where they are located?
  • What is their role or contribution?
  • Which are the main drivers of changes in the division of labour among firms (i.e. digitisation, regulations, taxes/subsidies, copy rights policy, conservation etc.)?
  • Which kind of skills are crucial in which phase (ways of competing) and how are they reproduced?
  • What is/how is it transferred in networks (material, immaterial goods; skills, ideas, know how, financial capital)?
  • What are the labour conditions in the various phases?
  • How are these activities embedded (societal/network/territorial)?
  • What are the governance models/coordination mechanisms of the chain (including role of financialisation and related actors)?
  • Where and how is value created and captured?
  • To what extent do phases of CCIs contribute to local development and local identity?
  • Which policy strategies/recommendations can be seen as potentially effective given the structure of the production network?

To address these questions, we will construct stylised models of production networks in the selected CCIs based on empirical research along similar lines as presented in Mapping the Creative Value Chains; A Study on the Economy of Culture in the Digital Age (European Commission, 2017). We aim at capturing variation not just between sectors and between countries, but also within sectors by offering multiple case studies for each selected sector. This way, the dimensions of difference in production networks of CCIs and their drivers can be identified in a more systematic manner and thus offering a better foundation for policymaking.

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